March 02, 2012

Is Apple a Net Job Creator or Destroyer?

Apple's been taking heat lately about their manufacturing locations and treatment of workers at FoxConn and elsewhere.

Today, the company struck back, releasing a study showing that the Company and its ecosystem have been responsible for the creation of 514,000 U.S. jobs. About 10% of those jobs are with Apple itself (47,000 of their 70,000 employees are in the U.S.), the rest include jobs by companies in their supply chain (e.g. Corning, creator of iPad and iPhone screens) as well as those of the Fedex workers who deliver their products.

The company also made a point of noting that their 21 call centers are located in the U.S., while they could have saved money outsourcing support to India, for example. The driver there is not goodwill, of course, as they point out that the reason they keep their call centers in the US is that they believe it provides a better customer experience.

Apple further estimates that more than 210,000 jobs were created from the iOS app ecosystem since 2007, extrapolating from a recent TechNet study.

I won't quibble with the numbers. They used an outside firm to develop the study and I've got no insights to challenge their methodology. At the same time, pushing that study out could be a slippery slope.

It won't surprise me to see other studies come out, aiming to tally up the number of workers displaced by Apple. We've recently seen the bankruptcy of Kodak, a company which lost its footing early in the digital camera era, began to recover a bit, then got displaced by the cameras in their phones. The Netbook industry has vanished with the emergence of tablet computing and the laptop industry is taking a good hit as well.

Conversely, iTunes has done a lot to save the recording industry from complete death. Until iTunes made it convenient to buy music, most digital music was pirated. While the music industry may not love Apple's business terms, there have clearly been many music industry jobs saved by iTunes.

Now, it's not Apple's job to keep people employed at other companies any more than it would be Google's job to keep the newspaper industry afloat. Transformational technology, by its very nature, is disruptive. And society votes with its pocketbook as to whether these issues matter to most individuals. When the iPad 3 is announced in a few days, millions will line up to order one. Unless there is pressure from consumers, Apple and its peers will continue to source materials from the least expensive providers. I'd gladly pay a $50 tariff for a "fair trade" iPad, or maybe a $100 higher fee for one made in the US. But until consumers demand those options, we can't expect Apple to change.

So, is Apple a net job creator or destroyer? That's hard to tell. I'd wager there have been many more jobs displaced by Apple than enabled or created by them. And while that's not their responsibility, they do have to be very careful before initiating a PR war in which they may not come out smelling sweet.

In the meantime, I miss the days when the co-occurrence of Apple and Jobs in a sentence was referring to their founder.

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Is Apple a Net Job Creator or Destroyer?

Apple's been taking heat lately about their manufacturing locations and treatment of workers at FoxConn and elsewhere.

Today, the company struck back, releasing a study showing that the Company and its ecosystem have been responsible for the creation of 514,000 U.S. jobs. About 10% of those jobs are with Apple itself (47,000 of their 70,000 employees are in the U.S.), the rest include jobs by companies in their supply chain (e.g. Corning, creator of iPad and iPhone screens) as well as those of the Fedex workers who deliver their products.

The company also made a point of noting that their 21 call centers are located in the U.S., while they could have saved money outsourcing support to India, for example. The driver there is not goodwill, of course, as they point out that the reason they keep their call centers in the US is that they believe it provides a better customer experience.

Apple further estimates that more than 210,000 jobs were created from the iOS app ecosystem since 2007, extrapolating from a recent TechNet study.

I won't quibble with the numbers. They used an outside firm to develop the study and I've got no insights to challenge their methodology. At the same time, pushing that study out could be a slippery slope.

It won't surprise me to see other studies come out, aiming to tally up the number of workers displaced by Apple. We've recently seen the bankruptcy of Kodak, a company which lost its footing early in the digital camera era, began to recover a bit, then got displaced by the cameras in their phones. The Netbook industry has vanished with the emergence of tablet computing and the laptop industry is taking a good hit as well.

Conversely, iTunes has done a lot to save the recording industry from complete death. Until iTunes made it convenient to buy music, most digital music was pirated. While the music industry may not love Apple's business terms, there have clearly been many music industry jobs saved by iTunes.

Now, it's not Apple's job to keep people employed at other companies any more than it would be Google's job to keep the newspaper industry afloat. Transformational technology, by its very nature, is disruptive. And society votes with its pocketbook as to whether these issues matter to most individuals. When the iPad 3 is announced in a few days, millions will line up to order one. Unless there is pressure from consumers, Apple and its peers will continue to source materials from the least expensive providers. I'd gladly pay a $50 tariff for a "fair trade" iPad, or maybe a $100 higher fee for one made in the US. But until consumers demand those options, we can't expect Apple to change.

So, is Apple a net job creator or destroyer? That's hard to tell. I'd wager there have been many more jobs displaced by Apple than enabled or created by them. And while that's not their responsibility, they do have to be very careful before initiating a PR war in which they may not come out smelling sweet.

In the meantime, I miss the days when the co-occurrence of Apple and Jobs in a sentence was referring to their founder.